Irrevocable Life Insurance Trusts

Irrevocable Life Insurance Trusts, frequently referenced as ILITs, are Advanced Estate Planning tools that allow clients to avoid a common mistake: the inclusion of life insurance proceeds in their taxable estate upon death.

Many clients incorrectly assume that because life insurance proceeds are not considered to be income for income tax purposes that they are not taxable by the government at all; however, if a life insurance policy is owned by that client when they pass away, the proceeds will be subject to hefty Estate Taxes.

ILITs can be an excellent way for a client who is already exposed to Estate Tax liability to remove the burden of those taxes from their heirs by purchasing an insurance policy to cover those prospective costs and placing it in an ILIT.

Avoid Estate Tax Liability

ILITs help clients avoid Estate Tax liability on the proceeds of life insurance policies by removing “incidents of ownership” that the client may have regarding the policies. ILITs are a kind of Irrevocable Trust, meaning that the client will not be able to modify or revoke the trust in any way once it is created and funded; removing incidents of ownership and allowing the beneficiaries to receive life insurance benefits free from Estate Taxes.

ins-smILITs can be an excellent way for a client who is already exposed to Estate Tax liability to remove the burden of those taxes from their heirs by purchasing an insurance policy to cover those prospective costs and placing it in an ILIT. Other clients can use ILITs to simply increase the amount of inheritance left to their heirs through life insurance proceeds: this is an extremely flexible solution.

The attorneys of Bezaire, Ledwitz & Associates have the knowledge and experience—many of our attorneys are licensed Life Insurance Agents—to appropriately advise clients on whether they should utilize an ILIT to achieve their estate planning goals.

Zoom Meeting Information

Samuel B. Ledwitz has been practicing Estate Planning Law for two decades.

He would like to introduce you to the basics of Estate Planning during an informational free upcoming Zoom session.

New sessions have been scheduled. See below for new dates: updates:

 

Session 1 June 29, 10:00AM

Session 2 June 30, 2:00PM

 

 

During this session you can learn:

  • What is a proper Estate Plan

  • Why it is so important to have a proper Estate Plan

  • The do’s and don’ts of Estate Planning

  • Many other aspects of Estate Planning that could affect you

 

Use the form below to sign up.

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